Answer:
Gift tax is not an issue for most people
Explanation:
The person gifting files the gift tax return, if necessary, and pays any tax. If someone gives you more than the annual gift tax exclusion amount ($15,000 in 2020), the giver must file a gift tax return.
The act that created a “pay-as-you-go” system that requires Congress to raise enough revenue to cover increases in direct spending
B. the 1990 Budget Enforcement Act
Question2 Every hour, the federal government spends about
B. $250 thousand
Explanation:
The act came as a response to the impending recession the western markets in the 1990 fiscal year which was to hit USA particularly hard. This came as a result of and in contrast with many conservative measures taken by the President George W Bush Sr up until that point.
The president had been saying till then that the opposition and the population could read his lips that there will not be new taxes.
It did happen though as this law allowed the government to increase taxation rates to cover governmental spending.
Answer:
b. <u>cash, investments, and receivables, inventories, prepayments</u>
Explanation:
Financial assets refer to liquid assets which derive their value from ownership rights and claims. For example, bonds, mutual funds, etc are financial assets.
In the given case, cash, investments, receivables, inventories, prepayments (prepaid expense) etc are liquid assets and current assets which can be readily converted to cash. Investments could be both short term and long term.
Investments in treasury bonds are highly liquid.
Capital assets are usually those assets with maturity period of more than one year and unlike current assets are not intended for sale.
Answer:
$288 (F)
Explanation:
In order to calculate activity variance we subtract actual results from the flexible budget. Moreover, the flexible budget is determined by taken into account both fixed and variable expense of the activity. This is shown below:
Flexible Budget of Selling and Administrative Expense = 25,900 + (2.1 x 5,980) = $38,458
Variance = 38,170 - 38,458 = $288 (F)
Because the actual expense is less than the flexible budget, the variance is favorable (F).
Note: Variable flexible budget is calculated by multiplying the variable rate with the actual units produced.
Answer:
a). Future price of stock in five years=$98.97
b). The current stock price will not be affected by an increase of $1 in stock price, this is because increase in stock price is a function of the expected dividend growth rate and not the current stock price
Explanation:
a). Use the expression for calculating the required rate of return as to determine the expected dividend growth rate follows:
RRR=(EDP/SP)+DGR
where;
RRR=required rate of return
EDP=expected dividend payment
SP=share price
DGR=dividend growth rate
In our case:
RRR=10%=10/100=0.1
EDP=$1
SP=$65.88
DGR=y
replacing in the original expression;
0.1=(1/65.88)+y
y=0.1-(1/65.88)
y=0.0848
The expected dividend growth rate=8.48%
Future price of stock=Current price(1+DGR)^n
where;
Current price=$65.88
DGR=8.48%=8.48/100=0.0848
n=5 years
replacing;
Future price of stock=65.88(1+0.0848)^5
Future price of stock=$98.97
b). The current stock price will not be affected by an increase of $1 in stock price, this is because increase in stock price is a function of the expected dividend growth rate and not the current stock price
